USG Corporation Reports 2011 Fourth Quarter and Full Year Results

Fourth Quarter 2011 vs. Fourth Quarter 2010

Consolidated Business Highlights

  • Sales increased 7.8 percent to $750 million
  • Operating loss of $42 million compared to $95 million
  • Adjusted operating loss of $37 million compared to $39 million

Business Unit Highlights

  • U.S. Gypsum wallboard shipments totaled 1.09 BSF vs. 945MMSF
  • U.S. Gypsum average wallboard price of $112.59 per thousand square feet vs. $111.95
  • Worldwide Ceilings operating profit increased $6 million, or 50 percent
  • L&W same store net sales increased 8 percent
  • SHEETROCK® Brand UltraLight Panels accounted for 38 percent of all USG wallboard shipments in the United States

CHICAGO--()--USG Corporation (NYSE:USG), a leading building products company, today reported fourth quarter 2011 net sales of $750 million, up nearly 8 percent from fourth quarter 2010 net sales of $696 million. USG’s fourth quarter operating loss was $42 million compared to a $95 million loss in the fourth quarter of 2010. The fourth quarter 2011 net loss after-tax was $100 million or $0.95 per share. This compares to a $121 million net loss in 2010 or $1.17 per share.

“While some markets remain at or near historically low levels, all of our businesses continue to benefit from the strategic actions we have taken to reduce costs and strengthen our operations,” said James S. Metcalf, Chairman, President and CEO. “United States Gypsum Company and L&W Supply Corporation, our two largest businesses, reduced their reported operating losses in 2011 compared to the prior year, while many of our other key units achieved an operating profit in 2011.”

“The success of our SHEETROCK® Brand UltraLight wallboard products in 2011 was one of the highlights of the year,” Metcalf continued. “Market acceptance and customer feedback regarding both the 1/2 inch product and the newer 5/8 inch products have been outstanding. We foresee significant opportunities to extend the proprietary lightweight technology to other product categories, including our market-leading family of joint treatment products.”

The corporation’s adjusted operating loss was $37 million in the fourth quarter of 2011, which compares to an adjusted operating loss of $39 million in the fourth quarter of 2010. The adjusted operating loss for the fourth quarter of 2011 excludes $5 million of restructuring and asset impairment charges. The adjusted operating loss for the fourth quarter of 2010 excludes $56 million of restructuring and asset impairment charges.

The Corporation recorded full year 2011 net sales of $3.0 billion, an operating loss of $197 million and a net loss of $390 million. For the full year 2010, net sales were $2.9 billion, the operating loss was $260 million and net loss was $405 million.

Looking ahead, Metcalf said, “Our goal is to continue taking the actions necessary to achieve an adjusted operating profit as soon as possible. We will remain focused on strengthening our core businesses, diversifying our earnings and differentiating USG though innovation.”

A conference call is being held today at 10:00 A.M. Central Time during which USG senior management will discuss the corporation’s operating results. The conference call will be webcast on the USG Web site, www.usg.com, in the Investor Relations section. The dial-in number for the conference call is 1-800-315-2944 (1-847-413-2929 for international callers), and the pass code is 31586992. After the live webcast, a replay of the webcast will be available on the USG Web site. In addition, a telephonic replay of the call will be available until Friday, February 10, 2012. The replay dial-in number is 1-888-843-7419 (1-630-652-3042 for international callers), and the pass code is 31586992.

USG Corporation is a manufacturer and distributor of high-performance building systems through its United States Gypsum Company, USG Interiors, LLC, L&W Supply Corporation and other subsidiaries. Headquartered in Chicago, USG’s worldwide operations serve the residential and non-residential construction markets, repair and remodel construction markets, and industrial processes. USG’s wall, ceiling, flooring and roofing products provide leading-edge building solutions for customers, while L&W Supply branch locations efficiently stock and deliver building materials nationwide. For additional information, visit the USG Web site at www.usg.com.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 related to management’s expectations about future conditions. Actual business, market or other conditions may differ from management’s expectations and, accordingly, may affect our sales and profitability or other results and liquidity. Actual results may differ due to various other factors, including: economic conditions, such as the levels of new home and other construction activity, employment levels, the availability of mortgage, construction and other financing, mortgage and other interest rates, housing affordability and supply, the levels of foreclosures and home resales, currency exchange rates and consumer confidence; capital markets conditions and the availability of borrowings under our credit agreement or other financings; competitive conditions, such as price, service and product competition; shortages in raw materials; changes in raw material, energy, transportation and employee benefit costs; the loss of one or more major customers and our customers’ ability to meet their financial obligations to us; capacity utilization rates; changes in laws or regulations, including environmental and safety regulations; the outcome in contested litigation matters; the effects of acts of terrorism or war upon domestic and international economies and financial markets; and acts of God. We assume no obligation to update any forward-looking information contained in this press release.

 
 
USG CORPORATION
CONSOLIDATED STATEMENT OF EARNINGS
(dollars in millions except per share data)
(Unaudited)
       
Three Months Twelve Months
ended December 31, ended December 31,
2011 2010 2011 2010
 
 
Net sales $ 750 $ 696 $ 3,024 $ 2,939
 
Cost of products sold   707     652     2,839     2,775  
 
Gross profit 43 44 185 164
 
Selling and administrative expenses 80 83 307 314
 
Restructuring and long-lived asset   5     56     75     110  
impairment charges
 
Operating loss (42 ) (95 ) (197 ) (260 )
 
Interest expense 53 49 211 183
 
Interest income (1 ) (2 ) (6 ) (5 )
 
Other (income) expense, net   -     1     (2 )   1  
 
Loss before income taxes (94 ) (143 ) (400 ) (439 )
 
Income tax benefit   6     (22 )   (10 )   (34 )
 
Net loss $ (100 ) $ (121 ) $ (390 ) $ (405 )
 
Basic loss per common share $ (0.95 ) $ (1.17 ) $ (3.76 ) $ (4.03 )
Diluted loss per common share $ (0.95 ) $ (1.17 ) $ (3.76 ) $ (4.03 )
 
Average common shares 105,361,746 102,872,914 103,902,038 100,471,635
Average diluted common shares 105,361,746 102,872,914 103,902,038 100,471,635
 
Other Information:
Depreciation, depletion and amortization $ 41 $ 44 $ 166 $ 178
Capital expenditures $ 17 $ 21 $ 55 $ 39
 
Average common shares and average diluted common shares outstanding are calculated in accordance with
Accounting Standards Codification 260, "Earnings Per Share."
 
 
 

USG CORPORATION
CORE BUSINESS RESULTS
(dollars in millions)
(Unaudited)
       
Three Months Twelve Months
ended December 31, ended December 31,
2011 2010 2011 2010

Net Sales:

 
North American Gypsum:
United States Gypsum Company $ 325 $ 302 $ 1,297 $ 1,295
CGC Inc. (gypsum) 77 69 307 290
USG Mexico, S.A. de C.V. 38 41 161 151
Other subsidiaries* 8 11 32 33
Eliminations   (26 )   (30 )   (102 )   (111 )
Total   422     393     1,695     1,658  
 
Building Products Distribution:
L&W Supply Corporation   264     250     1,060     1,061  
 
Worldwide Ceilings:
USG Interiors, Inc. 105 94 448 422
USG International 56 51 231 224
CGC Inc. (ceilings) 15 14 67 62
Eliminations   (12 )   (10 )   (49 )   (48 )
Total   164     149     697     660  
 
Eliminations   (100 )   (96 )   (428 )   (440 )
Total USG Corporation $ 750   $ 696   $ 3,024   $ 2,939  
 
 

Operating Profit (Loss):

 
North American Gypsum:
United States Gypsum Company $ (18 ) $ (61 ) $ (78 ) $ (160 )
CGC Inc. (gypsum) 1 1 (1 ) 17
USG Mexico, S.A. de C.V. 5 5 21 17
Other subsidiaries*   (9 )   (21 )   (78 )   (39 )
Total   (21 )   (76 )   (136 )   (165 )
 
Building Products Distribution:
L&W Supply Corporation   (15 )   (12 )   (68 )   (97 )
 
Worldwide Ceilings:
USG Interiors, Inc. 15 10 66 57
USG International 1 (1 ) 12 7
CGC Inc. (ceilings)   2     3     13     10  
Total   18     12     91     74  
 
Corporate (20 ) (19 ) (80 ) (69 )
Eliminations   (4 )   -     (4 )   (3 )
Total USG Corporation $ (42 ) $ (95 ) $ (197 ) $ (260 )
 
* Includes a shipping company in Bermuda and a mining operation in Nova Scotia.
 
 
 

USG CORPORATION
CONSOLIDATED BALANCE SHEETS
(dollars in millions)
(Unaudited)
   
As of As of
December 31, December 31,
2011 2010
 
Assets
Current Assets:
Cash and cash equivalents $ 365 $ 629
Short-term marketable securities 164 128
Restricted cash 1 4
Receivables (net of reserves - $18 and $17) 324 327
Inventories 305 290
Income taxes receivable 8 3
Deferred income taxes 4 6
Other current assets   55     50  
Total current assets 1,226 1,437
 
Long-term marketable securities 122 150
Property, plant and equipment (net of accumulated
depreciation and depletion - $1,637 and $1,546) 2,117 2,266
Deferred income taxes 25 -
Other assets   229     234  
 
Total Assets $ 3,719   $ 4,087  
 
 
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 233 $ 218
Accrued expenses 266 294
Current portion of long-term debt 7 7
Deferred income taxes 12 -
Income taxes payable   7     10  
Total current liabilities 525 529
 
Long-term debt 2,297 2,301
Deferred income taxes 6 7
Other liabilities 735 631
Commitments and contingencies
 
Stockholders' Equity:
Preferred stock - -
Common stock 10 10
Treasury stock - (55 )
Capital received in excess of par value 2,561 2,565
Accumulated other comprehensive loss (174 ) (50 )
Retained earnings (deficit)   (2,241 )   (1,851 )
Total stockholders' equity   156     619  
 
Total Liabilities and Stockholders' Equity $ 3,719   $ 4,087  
         
Other Information:
Total cash and cash equivalents and marketable securities 651 907
Borrowing availability from lines of credit   183     156  
Total Liquidity   $ 834     $ 1,063  
 
 
 

USG CORPORATION
RECONCILIATION of ADJUSTED OPERATING LOSS to REPORTED GAAP OPERATING LOSS
(dollars in millions)
(Unaudited)
       
Three Months Twelve Months
ended December 31 ended December 31
2011 2010 2011 2010
 
Adjusted Operating Profit (Loss):
North American Gypsum $ (15 ) $ (23 ) $ (69 ) $ (72 )
Building Products Distribution (16 ) (11 ) (61 ) (82 )
Worldwide Ceilings 18 13 91 75
Corporate (20 ) (18 ) (79 ) (68 )
Eliminations   (4 )   -     (4 )   (3 )
Total   (37 )   (39 )   (122 )   (150 )
 
 
Restructuring and Long-Lived
Asset Impairment Charges:
North American Gypsum 6 53 67 93
Building Products Distribution (1 ) 1 7 15
Worldwide Ceilings - 1 - 1
Corporate   -     1     1     1  
Total   5     56     75     110  
 
 
Reported GAAP Operating Profit (Loss):
North American Gypsum (21 ) (76 ) (136 ) (165 )
Building Products Distribution (15 ) (12 ) (68 ) (97 )
Worldwide Ceilings 18 12 91 74
Corporate (20 ) (19 ) (80 ) (69 )
Eliminations   (4 )   -     (4 )   (3 )
Total   (42 )   (95 )   (197 )   (260 )
 
References to Adjusted Operating Loss are non-GAAP measures. Management believes this information provides
investors with a more useful comparison of the corporation's ongoing business performance.
 
 

UNITED STATES GYPSUM COMPANY
GYPSUM WALLBOARD REALIZED SELLING PRICES & SHIPMENTS
                             
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full Year
Year Price   Volume Price   Volume Price   Volume Price   Volume Price   Volume
2011 $ 109.15 0.99 $ 111.55 0.99 $ 111.66 1.05 $ 112.59 1.09 $ 111.27 4.11
 
2010 $ 106.58 1.15 $ 114.17 1.07 $ 114.45 1.03 $ 111.95 0.95 $ 111.66 4.19
 
Wallboard price reflects amount per one thousand square feet.
Volume expressed in billions of square feet.

Contacts

USG Corporation
Media Inquiries: 312/436-4356
Investor Relations: 312/436-6098

Release Summary

USG Corporation 2011 Fourth Quarter and Full Year Results

Sharing

Contacts

USG Corporation
Media Inquiries: 312/436-4356
Investor Relations: 312/436-6098